Thursday, April 12, 2012

Economics Lesson

After I read what I posted yesterday about our financial situation I realized that some may have gotten the wrong impression so I will attempt to clarify.

The repairs to the Lexus I paid for with money that my folks had given to us at Christmas time as an advance on my inheritance.  Not sure why they felt that it was necessary but was glad for the assistance at a time when it was needed.

Puppy surgery went on the credit card till we can get the bike sold.  So even if I have to make a few payments it will be covered shortly.

The $50,000 lost on the real estate development was my pension money from my government service so basically what I never had I can't miss.  I probably will once I decide to retire but for the moment I am just chalking it up to a bad investment.

Now for the new vehicle portion.  This one gets a little complicated but I will try.  My 2007 Lexus was totally paid for so the trade in value was all towards the new vehicle.  New price minus trade in was a little over $11000 financed over 66 months at $190/month = $12540.  By doing this and getting bumper to bumper warranty for 8 years I get rid of the headache of worrying about how many more repairs I have to put on the Lexus.

Sometimes things don't make a whole lot of sense when you read or just think about them but when you do the math it works.  The Lexus is very expensive to maintain and uses premium gas.  The new one gets free services, uses regular gas and I get .30 cents a litre off my gas till 2013.  The amount I will save in gas alone each month will most likely make the payments for the next year.  Also, the mileage per litre of gas will most likely double as the new vehicle is only half the weight of the Lexus.

Believe me I will have to do a little more budget crunching and pray that we don't have any more major expenses but I am up for the challenge and if need be I can get a second job.  I just cannot afford to keep the Lexus and worry each day what may or may not go wrong with it.  Luxury vehicles are nice but once the warranty is off of them they become a big liability.  We bought the Lexus in 2007 at a really good price and I got almost what I paid for it on trade in value.  If I wait another year to trade it in then I run the risk of doing more repairs and will lose on the trade in value as once they hit 5 years old they go down hill fast.

Some may not agree that I did the right thing but when I sat down and discussed it with hubby and son it was the best alternative at this time.

In the meantime we plod along and pray that Canada Pension approves hubby's disability application and that the lawyer can get a good settlement from the insurance company. 

I pray you all have a fantastic day tomorrow and a wonderful weekend (don't tell anyone but they are forcasting snow for us this weekend).


  1. I looked at the last post and realized you must mean me. I didn't misunderstand at all - I think you are amazing that you pulled yourself up out a really difficult time and were fortunate [and very savvy] to get a great deal on a new car. I am just a wee bit jealous, heehee, because I MISS my Hyundai so much and the 2012s are gorgeous. [I kid about being jealous. Our van serves us really well and I don't drive anymore, so what do I need a car for?] :D Plus you got an 8 year warranty - fabulous. I don't know how much clearer I could've been in telling you I was happy for you, sorry you misunderstood me. I thought your post was pretty clear. It's me that was scratching my head.

    Sorry about that. I guess I will stick to an occasional "YAY" and "YIPPEE" and just hush up.

    Take care and enjoy your summer. Hugs!

    1. Hehehe Skippy seems like I was the one that misread. Actually I understood what you said perfectly, it was what I wrote that threw me for a loop. I thought if anyone was reading it I sounded like I didn't give a darn about my finances and all that mattered was what I was getting. Oh man,sometimes my writing skills require serious work. So you made perfect sense I was the blundering idiot. You just keep posting what you like and I will keep reading. Luv ya, big hugs!!!!